8 ms·

FTA: "Google says it has access to roughly 70% of U.S. credit and debit card transactions through partnerships with companies that track that data." Wow.

spydum 9y ago
Agree -- that is a staggering figure and I'd love to know more about what they mean here.
AznHisoka 9y ago
MasterCard and Visa not only make money from each credit card transaction but to add insult to injury, they make money selling that transaction data as well! That's what I call a ludicrous business.
- choward 9y ago
  Or like cable companies trying to get you to pay for TV and then also wanting you to watch commercials. It's all about double dipping.
  - Fifer82 9y ago
    And Cinemas! I realized a few years ago with the Scottish Indy Ref, that the BBC was state media so I briefly stopped watching and paying for that service. As a result, everything else that is moving media is surrounded by spam. Even if you pay 60 pound for a premium service (Think how much money it is, even if you have infinite money), you will spend 1/3 of that time watching Adverts. It is like a Freemium Game Model but when you pay, it doesn't matter. I have no idea why people are so careless with their time. Now that I ditched TV/Film, and found other ways to fill that time, I honestly feel better within myself. I twiddle around with robots while listening to the 20 hour audiobook (of your 90 minute film), or try to grow Carrots with some weird automated soil probe remotely at an Allotment. Compared to the enjoyment I get from these time fillers, motion picture is honestly the lowest form of entertainment and the lest rewarding.
  - gdulli 9y ago
    You understand you pay cable companies for the infrastructure and it's different companies who show you the programming, right? Do you call it double dipping when you pay your internet provider and then the Netflix account isn't free?
- imron 9y ago
  Not sure if you meant lucrative. Ludicrous also works.
- chinathrow 9y ago
  Indeed - and with their stupid reward programs they essentially buy the users to spend more and more with them.
- speedplane 9y ago
  I've heard that this is not a very big business for Visa/Mastercard. That's because the credit card processors don't get many details on the purchase, they just know the amount, the user, and the bank they are sending the money to.
  - thr0waway1239 9y ago
    That's because they can't do much with this info since they aren't also a giant ad network. Now imagine the same data in the hands of a company which has built one. They should probably start charging more :-)
  - puzzle 9y ago
    False. Years ago I had a business credit card charge from either Target or Kmart where you could see the individual items. So some merchants do share that kind of detail.
  - hyperbovine 9y ago
    My bank seems to know the origin and destination of all the plane tickets I buy (for example), so presumably the CC processor has this sort of information as well? I'm sure someone reading this is in the industry and can explain.
    - rcar 9y ago
      Plane tickets have an odd setup in CC processing systems where it actually shows origin/destination in the transaction information itself. The only other similar example I've seen has been in payment processors like Square or Paypal where they'll include both that it was a Paypal transaction and some customizable string showing the merchant who actually received the payment. Other than those sorts of situations though, Visa/MC or the bank issuing the cards only know where the transaction occurred and how much it was and don't directly get SKU-level data on what was purchased barring some other sort of partnership with the merchant.
    - gergles 9y ago
      Yeah, this is called "Level 3 data" and can include line items from a receipt and other details of transactions.
- bonzini 9y ago
  Is this also true of Amex (which makes more money from each credit card transaction than Visa and Mastercard)?
  - morganvachon 9y ago
    Just an uninformed guess, but I'd say that 70% figure probably covers Visa/MasterCard but not Amex or Discover, based on what I've observed working in retail in the past.
  - treyfitty 9y ago
    Yes. https://vimeo.com/155746893 https://vimeo.com/155746893 http://www.businesswire.com/news/home/20160517006038/en/Viacom-American-Express-Form-Exclusive-Partnership-Launch http://www.businesswire.com/news/home/20160517006038/en/Viac... They used to have a "Business Intelligence Group" which acted as a Consulting firm to corporations who want to answer questions like "Where should my company set up more stores?" The group often sifted through their customer data to answer that question.
    - bonzini 9y ago
      That's reasonable, and different from selling it to third parties.
- thesehands 9y ago
  a logical conclusion could be drawn that there either Visa/Mastercard should start an ad network, or Google gets in the credit card game (As android pay becomes more widely accepted, this may be an irrelevant step for them)
richjdsmith 9y ago
This is the point that really shocked me! I'd love to read more on this.
- greenyoda 9y ago
  The book "Chaos Monkeys"[1], while irritating in many ways, has a detailed description of how Facebook correlates its own advertising data with information from data brokers (such as credit card transaction aggregators). This kind of stuff has been happening for quite some time. (As an extra bonus, the book describes how the author's ad-tech startup got into YC and was bought by Twitter.) [1] https://www.amazon.com/dp/B019MMUAAQ https://www.amazon.com/dp/B019MMUAAQ
yborg 9y ago
I'm actually surprised that retailers haven't started surcharging people paying in cash by now in order to drive all of individuals' transaction data into the panopticon.
- mattnewton 9y ago
  They won't in the medium term because of how much they hate the credit card company's cut. 3% is a lot on an already low-margin transaction at Walmart.
  - creepydata 9y ago
    Walmart wouldn't take credit if it wasn't financially sound for them to do so.
    - ekianjo 9y ago
      It still has transaction costs.
      - sanswork 9y ago
        So does cash handling.
    - mattnewton 9y ago
      Doesn't mean they like the arrangement and are going to shill for the credit card companies though. That was my point.
      - creepydata 9y ago
        Um... Walmart IS a credit card shill, they have their own credit card - https://www.walmart.com/cp/walmart-credit-card/632402 https://www.walmart.com/cp/walmart-credit-card/632402 We don't know Walmart's feelings, they may like the arrangement. Business go cash free for all kinds of reasons. Customers that use credit spend more money than cash customers. Walmart probably isn't one of those places that benefit as much as a pub but they may have a small credit spending boost that covers the fees. Walmart is a really smart and data driven company and I'm sure they've weighed their options about what is effective business practices for them.
mc32 9y ago
So the only way to break the circle is to purchase with cash... And now fewer and fewer people buy with cash, to the point some Nordics plan on doing away with cash as much as possible.
- a3_nm 9y ago
  It's very important to keep making as many purchases in cash as possible, precisely for this reason. At least where I live (France), this is very doable. Cash is an anonymous payment system which cannot be traced and is widely accepted. It's something that would be impossible to bootstrap today if it didn't already exist. Hence, it's crucial to keep it alive.
  - Cyphase 9y ago
    > Cash is an anonymous payment system which cannot be traced ... I just wanted to point out the possibility of tracking serial numbers on bills. Obviously it's not going to be as reliable, at least not now, but it could be made more so; for instance, if there was a sudden movement to use more cash for privacy. Of course, that seems unlikely; most people like the convenience of plastic/digital payments, and there's a lot of market pressure pushing people toward those payment methods, so deploying the infrastructure for more reliable cash tracking probably isn't worth a whole lot. But I haven't exactly run the numbers, and there are other possible incentives, so who knows..
    - mc32 9y ago
      It is possible to track the serials, if they wanted to; however, except for banks, I have not exchanged cash with a retailer who scans the bills at the point of transaction and if they did, they'd also have to tie a given ser no with me at the time of purchase. Since a particular bill will go through many hands, it'd be like trying to figure out who made a change on a system when it was done by 'root' or 'administrator' where the whole team logs in as root or admin. Basically attribution would be kinda inaccurate.
      - 9y ago
fictioncircle 9y ago
Oh it gets better. "We don't know what you bought or how much". https://www.revolution-payments.com/requirements-for-level-3-processing/ https://www.revolution-payments.com/requirements-for-level-3... > Level 3 processing can benefit businesses who sell to other businesses or government by lowering your transaction cost by as much as 1.50%. > Line Item Details: Of course, if they are like one of the places I worked...they just turn it on for everyone and pass it along regardless.
chinathrow 9y ago
Exactly. Google: You're already way too deep in our lives and now this. When will you ever stop? When you own us?
thr0waway1239 9y ago
My first thought was: why only 70%? This may be a case where the savings (i.e. money from selling data in return for a big pile of cash) are actually passed on to the customer - e.g. transaction costs are lower for Visa/Mastercard for merchants, which is why they sometimes don't accept Amex and Discover. It would be interesting to see if Visa and Mastercard have some clause which prevents Google from buying data from AMEX and Discover (competitive advantage for them because then Amex and Discover's transaction costs aren't subsidized) in return for agreeing to part with their data. Said another way, what's preventing Google from also getting data from Amex or Discover? Its not as if Google is going to say no.
Sophira 9y ago
This was absolutely the most worrying part for me. How in the hell did Google get access to that much?

spydum 9y ago

Agree -- that is a staggering figure and I'd love to know more about what they mean here.

AznHisoka 9y ago

MasterCard and Visa not only make money from each credit card transaction but to add insult to injury, they make money selling that transaction data as well! That's what I call a ludicrous business.

choward 9y ago
Or like cable companies trying to get you to pay for TV and then also wanting you to watch commercials. It's all about double dipping.
- Fifer82 9y ago
  And Cinemas! I realized a few years ago with the Scottish Indy Ref, that the BBC was state media so I briefly stopped watching and paying for that service. As a result, everything else that is moving media is surrounded by spam. Even if you pay 60 pound for a premium service (Think how much money it is, even if you have infinite money), you will spend 1/3 of that time watching Adverts. It is like a Freemium Game Model but when you pay, it doesn't matter. I have no idea why people are so careless with their time. Now that I ditched TV/Film, and found other ways to fill that time, I honestly feel better within myself. I twiddle around with robots while listening to the 20 hour audiobook (of your 90 minute film), or try to grow Carrots with some weird automated soil probe remotely at an Allotment. Compared to the enjoyment I get from these time fillers, motion picture is honestly the lowest form of entertainment and the lest rewarding.
- gdulli 9y ago
  You understand you pay cable companies for the infrastructure and it's different companies who show you the programming, right? Do you call it double dipping when you pay your internet provider and then the Netflix account isn't free?
imron 9y ago
Not sure if you meant lucrative. Ludicrous also works.
chinathrow 9y ago
Indeed - and with their stupid reward programs they essentially buy the users to spend more and more with them.
speedplane 9y ago
I've heard that this is not a very big business for Visa/Mastercard. That's because the credit card processors don't get many details on the purchase, they just know the amount, the user, and the bank they are sending the money to.
- thr0waway1239 9y ago
  That's because they can't do much with this info since they aren't also a giant ad network. Now imagine the same data in the hands of a company which has built one. They should probably start charging more :-)
- puzzle 9y ago
  False. Years ago I had a business credit card charge from either Target or Kmart where you could see the individual items. So some merchants do share that kind of detail.
- hyperbovine 9y ago
  My bank seems to know the origin and destination of all the plane tickets I buy (for example), so presumably the CC processor has this sort of information as well? I'm sure someone reading this is in the industry and can explain.
  - rcar 9y ago
    Plane tickets have an odd setup in CC processing systems where it actually shows origin/destination in the transaction information itself. The only other similar example I've seen has been in payment processors like Square or Paypal where they'll include both that it was a Paypal transaction and some customizable string showing the merchant who actually received the payment. Other than those sorts of situations though, Visa/MC or the bank issuing the cards only know where the transaction occurred and how much it was and don't directly get SKU-level data on what was purchased barring some other sort of partnership with the merchant.
  - gergles 9y ago
    Yeah, this is called "Level 3 data" and can include line items from a receipt and other details of transactions.
bonzini 9y ago
Is this also true of Amex (which makes more money from each credit card transaction than Visa and Mastercard)?
- morganvachon 9y ago
  Just an uninformed guess, but I'd say that 70% figure probably covers Visa/MasterCard but not Amex or Discover, based on what I've observed working in retail in the past.
- treyfitty 9y ago
  Yes. https://vimeo.com/155746893 https://vimeo.com/155746893 http://www.businesswire.com/news/home/20160517006038/en/Viacom-American-Express-Form-Exclusive-Partnership-Launch http://www.businesswire.com/news/home/20160517006038/en/Viac... They used to have a "Business Intelligence Group" which acted as a Consulting firm to corporations who want to answer questions like "Where should my company set up more stores?" The group often sifted through their customer data to answer that question.
  - bonzini 9y ago
    That's reasonable, and different from selling it to third parties.
thesehands 9y ago
a logical conclusion could be drawn that there either Visa/Mastercard should start an ad network, or Google gets in the credit card game (As android pay becomes more widely accepted, this may be an irrelevant step for them)

richjdsmith 9y ago

This is the point that really shocked me! I'd love to read more on this.

greenyoda 9y ago
The book "Chaos Monkeys"[1], while irritating in many ways, has a detailed description of how Facebook correlates its own advertising data with information from data brokers (such as credit card transaction aggregators). This kind of stuff has been happening for quite some time. (As an extra bonus, the book describes how the author's ad-tech startup got into YC and was bought by Twitter.) [1] https://www.amazon.com/dp/B019MMUAAQ https://www.amazon.com/dp/B019MMUAAQ

yborg 9y ago

I'm actually surprised that retailers haven't started surcharging people paying in cash by now in order to drive all of individuals' transaction data into the panopticon.

mattnewton 9y ago
They won't in the medium term because of how much they hate the credit card company's cut. 3% is a lot on an already low-margin transaction at Walmart.
- creepydata 9y ago
  Walmart wouldn't take credit if it wasn't financially sound for them to do so.
  - ekianjo 9y ago
    It still has transaction costs.
    - sanswork 9y ago
      So does cash handling.
  - mattnewton 9y ago
    Doesn't mean they like the arrangement and are going to shill for the credit card companies though. That was my point.
    - creepydata 9y ago
      Um... Walmart IS a credit card shill, they have their own credit card - https://www.walmart.com/cp/walmart-credit-card/632402 https://www.walmart.com/cp/walmart-credit-card/632402 We don't know Walmart's feelings, they may like the arrangement. Business go cash free for all kinds of reasons. Customers that use credit spend more money than cash customers. Walmart probably isn't one of those places that benefit as much as a pub but they may have a small credit spending boost that covers the fees. Walmart is a really smart and data driven company and I'm sure they've weighed their options about what is effective business practices for them.

mc32 9y ago

So the only way to break the circle is to purchase with cash... And now fewer and fewer people buy with cash, to the point some Nordics plan on doing away with cash as much as possible.

a3_nm 9y ago
It's very important to keep making as many purchases in cash as possible, precisely for this reason. At least where I live (France), this is very doable. Cash is an anonymous payment system which cannot be traced and is widely accepted. It's something that would be impossible to bootstrap today if it didn't already exist. Hence, it's crucial to keep it alive.
- Cyphase 9y ago
  > Cash is an anonymous payment system which cannot be traced ... I just wanted to point out the possibility of tracking serial numbers on bills. Obviously it's not going to be as reliable, at least not now, but it could be made more so; for instance, if there was a sudden movement to use more cash for privacy. Of course, that seems unlikely; most people like the convenience of plastic/digital payments, and there's a lot of market pressure pushing people toward those payment methods, so deploying the infrastructure for more reliable cash tracking probably isn't worth a whole lot. But I haven't exactly run the numbers, and there are other possible incentives, so who knows..
  - mc32 9y ago
    It is possible to track the serials, if they wanted to; however, except for banks, I have not exchanged cash with a retailer who scans the bills at the point of transaction and if they did, they'd also have to tie a given ser no with me at the time of purchase. Since a particular bill will go through many hands, it'd be like trying to figure out who made a change on a system when it was done by 'root' or 'administrator' where the whole team logs in as root or admin. Basically attribution would be kinda inaccurate.
    - 9y ago

fictioncircle 9y ago

Oh it gets better. "We don't know what you bought or how much". https://www.revolution-payments.com/requirements-for-level-3-processing/ https://www.revolution-payments.com/requirements-for-level-3... > Level 3 processing can benefit businesses who sell to other businesses or government by lowering your transaction cost by as much as 1.50%. > Line Item Details: Of course, if they are like one of the places I worked...they just turn it on for everyone and pass it along regardless.

chinathrow 9y ago

Exactly. Google: You're already way too deep in our lives and now this. When will you ever stop? When you own us?

thr0waway1239 9y ago

My first thought was: why only 70%? This may be a case where the savings (i.e. money from selling data in return for a big pile of cash) are actually passed on to the customer - e.g. transaction costs are lower for Visa/Mastercard for merchants, which is why they sometimes don't accept Amex and Discover. It would be interesting to see if Visa and Mastercard have some clause which prevents Google from buying data from AMEX and Discover (competitive advantage for them because then Amex and Discover's transaction costs aren't subsidized) in return for agreeing to part with their data. Said another way, what's preventing Google from also getting data from Amex or Discover? Its not as if Google is going to say no.

Sophira 9y ago

This was absolutely the most worrying part for me. How in the hell did Google get access to that much?